Orios is considering a fifth sector-agnostic fund of $150-200 million next year that will invest in early-stage startups.

The Mumbai-based firm, which has invested in MobiKwik, PharmEasy and Country Delight among others, is open to all sectors, including software as a service (SaaS), agritech and healthtech, and is doubling down on its investments in early-stage startups, giving them checks worth $1 million to $2 million, Sukhmani Bedi, partner at Orios, said in an interview.

So far, nearly half of the $150 million in the fourth fund has been invested in startups including climate technology company Varaha and fixed-income lender Lendbox.

“We aim to complete the deployment from the current fund by early next year and start raising funds for the fifth fund by June 2025. We will continue to focus on the domestic ecosystem as we believe in the consumption story in India,” Bedi said.

While the size of the fifth fund could change depending on interest from limited partners (LPs), Bedi said $150-200 million is a good amount to generate high multiples.

“We have seen some funds getting big cheques from LPs and looking beyond Indian markets to generate hyper returns. But as a domestic fund, we know that a fund size of $150-200 million is enough to invest in the Indian ecosystem and generate good returns,” she noted.

Lots of possibilities

Orios launched its first fund in 2014 and closed it at ₹300 crore in the next year. It backed 18 companies, including dairy startup Country Delight, e-pharmacy firm PharmEasy and shared accommodation company Zostel. The fund was set to return 1x to its LPs, with increased returns expected in 2024 and 2025, it said in January.

“Looking back to Fund I, we see that the opportunity for startups has increased multifold. Technology has reached India and the hinterland. It has gone beyond consumer internet to B2B, SaaS, electric vehicles, climate technology and hardware,” said Rehan Yar Khan, Managing Partner, Orios.

In 2021, Orios created a $30 million investment fund to reinvest in new businesses such as Country Delight and PharmEasy.

Orios’ fourth fund was launched shortly after two partners, Anup Jain and Rajeev Suri, moved out. Given the seniority and importance of the roles, the firm will soon look for replacements, according to Bedi.

“We are now conducting more audits than before in two rounds of funding,” Bedi said.

Fast sales support

In the past few years, “building India for the world” has become a key theme for attracting investors, especially in technology-focused sectors like deep tech and climate. But Orios wants to stick to its thesis of supporting domestic startups, especially those that solve problems that are relevant to the country, Bedi said.

“While we will look closely at cross-border startups and global SaaS investments, we are reluctant to commit to anything due to FOMO (fear of missing out),” Bedi added.

According to Bedi, evolving consumption patterns in India have led to phenomenal growth in fast commerce, proving that the initial assumption of many venture capitalists was wrong. Fast commerce has grown tenfold from 2021 to 2023, driven by the need for convenience among urban consumers, according to a report by JM Financial.

However, instead of investing in fast-paced retail companies, Orios will look to back related entities such as logistics companies and technology firms, both in its current fund and the next one, Bedi said.